How will a firm's cash cycle be affected if one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, all else being equal (select the best choice below)? 1. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, its accounts payable days will increase. All else equal, this will cause the cash cycle of the firm to decrease. II. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, its accounts receivable days will increase. All else equal, this will cause the cash cycle of the firm to increase. III. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, its accounts payable days will decrease. All else equal, this will cause the cash cycle of the firm. to decrease. IV. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, its accounts payable days will increase. All else equal, this will cause the cash cycle of the firm to increase. O a. I and II O b. I and III O c. II and III Od. Only I e. Only II.
How will a firm's cash cycle be affected if one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, all else being equal (select the best choice below)? 1. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, its accounts payable days will increase. All else equal, this will cause the cash cycle of the firm to decrease. II. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, its accounts receivable days will increase. All else equal, this will cause the cash cycle of the firm to increase. III. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, its accounts payable days will decrease. All else equal, this will cause the cash cycle of the firm. to decrease. IV. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, its accounts payable days will increase. All else equal, this will cause the cash cycle of the firm to increase. O a. I and II O b. I and III O c. II and III Od. Only I e. Only II.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:How will a firm's cash cycle be affected if one of the firm's suppliers that was only accepting cash
payment before, now offers a trade credit to the firm, all else being equal (select the best choice below)?
1. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit
to the firm, its accounts payable days will increase. All else equal, this will cause the cash cycle of the firm
to decrease.
II. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit
to the firm, its accounts receivable days will increase. All else equal, this will cause the cash cycle of the
firm to increase.
III. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit
to the firm, its accounts payable days will decrease. All else equal, this will cause the cash cycle of the firm
to decrease.
IV. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit
to the firm, its accounts payable days will increase. All else equal, this will cause the cash cycle of the firm
to increase.
O a. I and II
O b. I and III
O c.
Od.
Only 1
O e. Only II
II and III
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